Mirage Energy took back a good part of its losses from Wednesday, posting a gain of 13.04% and closing at $1.30 on Thursday. CNA Finance initiated research coverage of MRGE based on the position and opportunity for MRGE to become a key player in the growth of Mexico’s drive toward energy independence and energy price stability.
While the stock has been whipped around during this trading week, MRGE has held on tightly to its market cap that has traded well north of $400 million since the beginning of the year. What remains intriguing about MRGE is that while they are a small company when it comes to its balance sheet, investors are willing to value the company at an extremely respectable valuation. To many investors, the valuation exemplifies confidence in the belief that MRGE may, in fact, be positioned better than most any competitor looking to provide energy and storage services into Mexico.
Staying Focused On MRGE
CNA Finance Chief Research Analyst believes that MRGE is set to capitalize on several key initiatives, with the primary focus being given to the construction of the 786 BCF natural gas storage facility that may deliver shareholder value during the incremental build-out. Other potential opportunities present themselves by having several key permits either already in hand or in the pending stage, which places them in an enviable position from a competitive standpoint.
While Soulstring believes that MRGE is a long term play, he see’s the near term catalysts in place to drive the share price closer to previous 2017 highs in the $2.00 range. Although the company will need funding to complete its ambitious project, investors have shown the willingness to stand along side of veteran oilman Michael Ward, CEO of Mirage Energy. Strategic opportunities, as well as capital raises, may signal near-term dilution, but in the long run, the expense can be quickly absorbed from the customer interest in storing natural gas in the completed storage facility.
Although MRGE took back just 13% of its losses on the week, historical prices have valued the stock much higher. And, with trading patterns being relatively volatile during the past few trading sessions, Soulstring believes that once the selling subsides MRGE may quickly regain price levels of more than $1.70 per share. Returning to its long-term and historical 2017 average, Soulstring sees’s potential gains of more than 30% from Thursday’s closing price in the near-term.
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